Factors1) AC (Automotive Components)Hydraulic Shock-absorbers for Four-wheel Vehicles -Overall sales of hydraulic shock absorbers for four-wheel vehicles increased 3.0 percent on a year-over-year basis. Sales remained the same level as last year in Japan, while production slowed down in Europe. Sales of these products grew in North America and Thailand. Aftermarket sales were favorable especially in emerging markets.

Hydraulic Equipment for Four-wheel Vehicles -As for the business performance of power-steering products, the Company's main hydraulic equipment for four-wheel vehicles, sales dropped 9.6 percent from last year's level mainly due to falling demand in China.

Global supply structure for hydraulic pumps for CVTs

-The Company is establishing a global supply structure for hydraulic pumps used in vehicles with continuously variable transmissions (CVTs). Its facilities in Japan and China currently produce a total of 280,000 units per month. In addition, the company will begin their production at its plant in Thailand this fall, which will be followed by operation launch at its new facility in Mexico next year. These two new factories are to output a total of 150,000 pumps per month, boosting the Company's global production capacity to 430,000 units per month, up 50% from the current volume. The enhancement is a move to deal with Japanese OEMs and transmission suppliers' expanding their production volumes. The Company intends to build a global supply structure with these four production facilities to be in line with the local production of its customers. The Company also considers increasing production at each base after 2014. (From an article in the Nikkan Jidosha Shimbun on Mar. 5, 2013)

Establish a co-parent company with Yamaha Motor

- The Company and Yamaha Motor Co., Ltd. announced that they would establish a joint-venture company, which will manufacture and sell hydraulic shock absorbers for motorcycles. The Company will spin off the motorcycle operations of its automotive components business to form KYB Motorcycle Suspension Co., Ltd., in which Yamaha will take a stake as of July 1, 2013. Based on this partnership between the motorcycle manufacturer and the supplier of hydraulic shock absorbers, the two companies aim to develop high quality and cost-competitive shock absorbers for motorcycles, and establish a supply system to deliver products worldwide, including to the emerging markets. The Company and Yamaha will own 66.6% and 33.4% equity stakes respectively in the joint venture, which will be capitalized at 400 million yen. (From an article in the Nikkan Jidosha Shimbun on Jan. 30, 2013)

Awards

-FY ended Mar. 31, 2013: "Special Award for Reducing the Number of Repair Parts" given by Toyota Motor Corp.

R&D Structure

-Development and testing of suspensions and steering devices for four- and two-wheel vehicles

Basic Technology R&D Center

Sagamihara City, Kanagawa Pref.

-Conducting basic research on hydraulic equipment and automobile devices and developing new products and technologies.

Electronics Technology Center

Sagamihara City, Kanagawa Pref.

-Designing and testing of electronic equipment. Accumulating production engineering technologies.

Production Technology R&D Center

Kani City, Gifu Pref.

-Development of technologies to improve product performances and reduce costs.

Machine Tools Center

Kani City, Gifu Pref.

-Accumulating knowhow for designing production equipment.-Carrying out projects to manufacture production equipment in-house.

Established Electronics Technology Center-The Company announced that it has established the Electronics Technology Center in Sagamihara City, Kanagawa Prefecture in order to improve its development capabilities in the area of electronics components. Functions of the new facility include designing and assessing of electronics devices and development of their manufacturing technologies. The engineering center, which opened on April 1 with a workforce of 40, is located on the premises of the Basic Technology R&D Center of the KYB Sagamihara Plant. Integration of designing and development activities, human resources, and technical knowhow into the new operation, will allow the company to establish a seamless production system for electronics components, which will include development, prototype manufacturing, up to mass production. The consolidation is expected to reduce production lead-time significantly. (From an article in the Nikkan Jidosha Shimbun on April 13, 2012)

R&D Activities

AC (Automotive Components)CVT vane pumps for mid- and heavy-duty vehicles-Products for Jatco: The Company developed high-performance, small displacement CVT vane pumps that can withstand higher revolution. The new products use the same components as existing products and can be produced on the same production lines. Production can be conducted outside Japan.

Adjustable shock absorbers-Products for Toyota and Nissan: The Company developed shock absorbers that can control damping forces according to the vibration frequency levels. The new products are used on both the Toyota Lexus "LS460" and the Nissan "Cima".

Electric Power Steering systems (EPS)Products for Subaru vehicles: The Company developed an advanced EPS system featuring a new torque sensor, a high-torque brushless motor, and a noise control mechanism. This EPS technology is used on the "Legacy".